Naftogaz of Ukraine is largest oil and gas company of the country which is
subordinated to the Government of Ukraine. The company has long been
considered to be so called “Monopolist” for the region while being one of the most profitable and sustainable in Ukraine.
However, Naftogas (NAC) has been on the radar of corruption news for last
few years, where the most recent and significant case was the investigation of the managers’ activities by Antimonopoly Committee of Ukraine. It emerged that Naftogaz artificially was inflating prices, knowing that the receiving companies would suffer losses. Prices for heat energy and housing and communal services increased by 60-70% as gas was being sold at 3 times higher than market rates. In this case, the profit of Naftogaz was getting higher, while the recipient companies were suffering heavy losses. It led to the aggravation of the conflict between former colleagues Yuriy Vitrenko and Andriy Kobolyev.
The frenemies and chief managers at one of the profitable Ukrainian
companies Naftogaz of Ukraine Yuriy Vitrenko and Andriy Kobolyev were
carrying out several fraudulent schemes under their leadership. Thus, since 2015, the tandem has been manipulating the gas pipeline system on the border with Europe, illegally obtaining more than 56 million dollars and contributing to the artificial overestimation of household prices, taking money from ordinary Ukrainians. But in 2018 it was reported that 2 outstanding managers have been at odds. But what exactly happened between Vitrenko and Kobolyev? Why has collaboration turned into a game of thrones?
Mr. Vitrenko and Mr. Kobolyev used to be colleagues and even friends.
Naftogaz received an unprecedented reward – 45 million dollars – a prize for winning the trial over Gazprom. The award immediately became scandalous for two reasons. First of all, Gazprom hadn’t been intended to pay the 2.6 billion dollars lost to Kiev — which means that Kobolyev, Vitrenko and their colleagues received the award not from the winnings, but from the state company’s funds. Secondly, it is unclear how ethical it was to give such sum to Naftofaz employees in the poorest country in Europe. Moreover, Kobolyev transferred $ 8 million to the United States to the account of his mother, and Vitrenko, who didn’t have any relatives in the USA, transferred money to Liechtenstein. After that Vitrenko himself had been repeatedly announced his dismissal. In addition, many experts stated that Kobolyev should have been unseated from his CEO position. However, in May Otto Waterlander took over Vitrenko’s position. However, the last straw for him was the reassignment of Kobolyev to the position of CEO. As many employees of Naftogaz said, Kobolyev did not occupy a leading position in fact, and Vitrenko could have taken his place. However, this did not happen. Obviously, Yuriy Vitrenko didn’t have such strong support from the West. Experts claimed that Vitrenko was one of the protégés of Kolomoisky, the controversial Ukrainian oligarch. However, in recent years, the position of the businessman has been weaken, and Vitrenko could not count on his help. As a result, Kobolyev was “saved” by his ties with the United States, and Vitrenko was simply disposed of. But why was this necessary? First of all, Kobolyev is into gas and energy sector –as he will carry out any requests as it would be needed, especially if there are cash bonuses. This is called “reformation” process with the primary goal of removing the oligarchs. Experts said that the Americans could promote the Chairman of the Board of NAC “Naftogaz Ukraine” Andriy Kobolyev to the post of Prime Minister of Ukraine, as he meekly gives them full control over energy, resources, land and Naftogaz of Ukraine. Thus Ukrainian media called him a protégé of Soros.
However, Mr. Vitrenko, who has been left as a lame duck, tried to explain
the reason of his dismissal: “Friends! I have just been formally warned that my position is being cut, which means that in two months I will be fired from Naftogaz. Since we constantly have to fight against disinformation, and “with superior enemy forces”, we will have to resort to radical openness again and lay out our vision of the situation here,” – one of the NAC leaders said.
Vitrenko accused Kobolyev of refusing to reform Naftogaz and fight against the leadership of Gazprom. After that, he blamed a former colleague on corruption and money laundering. He also gave specific examples of the failed work of his former boss , even before he joined the leadership of Naftogaz. In fact, Vitrenko accused Kobolyev that under of the patronage of former prime minister Y. Tymoshenko, Ukraine had signed a contract with Gazprom, that eventually sent Timoshenko to prison on corruption charges. According to Vitrenko, he told the inconvenient truth about Kobolyev not because he had fired him. On the contrary, his dismissal was Kobolyev’s reaction to an inconvenient truth in which he saw a threat to his CEO
But officially, Mr.Vitrenko’s dismissal in NAC “Naftogaz of Ukraine” was
explained as a derestructuring of his position. Company declared that as part of the transformation, Naftogaz group was optimizing the internal organizational structure, functionality and responsibilities between divisions. Also, according to the experts, many Vitrenko’s associates are still remaining within Naftogaz, as they can provide additional information about the company’s suspicious activities and undermine Kobolyev’s work.
However, according to the Head of “A95” company ” Sergey Kuyun, Vitrenko’s post about the reasons for dismissal was a cheap PR trick and his “achievements” are quite questionable. Kuyun stated that “Yuriy Vitrenko owed his career to NAC, that in fact, to citizens of Ukraine, who had been paying for his education in one of the most prestigious business schools in the world. He left the company as a dollar millionaire. Regarding the dispute with Gazprom, the expert recalled that the company had hired the most powerful legal teams to represent the company which had costed Naftogas more than a dozen million dollars.”
The expert also recalled that Vitrenko had supervised “Ukrnafta” since the
beginning of 2019 and is the head of the Supervisory Board. “This company has been practically running by Kolomoisky who in fact increased his influence within a company. In the past, NAC has managed & influenced the company at least through the Supervisory Board. However, after Vitrenko “agreed” on an independent Supervisory Board and the NAC’s monolithic structure collapsed. The plan is excellent: the state must pay for everything.”
Vitrenko and Kobalyev are just few players in the game where Naftogas is at the center of geo-political and financial puzzle. However, the history shows that no matter who is the CEO or direct of development of the company, ordinary people and business of Ukraine continue to suffer from inflating gas prices that enrich only the management of Naftogas.